Hong Kongers are many missing out on potential tax savings and breaks, recent research has found.
Manulife surveyed 1,001 Hong Kong taxpayers about their knowledge of local rules, including the various allowances and deductibles they can claim.
Respondents answered on average 3-out-of-10 questions correctly.
When filing their tax returns Hongkongers are good at leveraging long-existing tax-deductible items such as dependents, charitable donations and home loan interest, with 76% including these deductibles – typically two – in their submissions.
Gaps in tax knowledge
Some respondents wrongly thought that critical illness (13%) and savings products (17%) could also be used to reduce taxes.
Around 60% knew that eligible personal allowances for salaries tax include those for children, parents, grandparents and dependent siblings. The same number correctly said that home loan interest, expenses on self-education and approved charitable donations are eligible for tax deductions.
When filing their tax returns, 64% of those surveyed said they used the same set of allowance and deduction items as in previous years, compared to 69% who said they would discuss with others on how to maximise the allowance and deduction items for better tax-savings.
Nearly two-fifths (39%) of respondents said they just paid the stated amount, while 61% said they checked the assessment to make sure the calculations were done correctly.
Wilton Kee, chief product officer and head of health at Manulife Hong Kong, said: “In general, people who scored higher were typically older and paid more taxes. If taxpayers can learn more about tax-deductible products and tools, they’ll be in a better position to maximise tax savings.”
